After a lot of debates and discussions, South Korea seems to have set a hard date for the introduction of crypto taxation. The latest reports indicate that the country will implement a 20% tax on bitcoin and other crypto profits from January 1, 2022.
The country’s Ministry of Economy and Finance said that all profits made from trading and holding cryptos will be subjected to this new tax, reported the Korean Herald on February 22.
This tax will automatically get triggered when the profits made from cryptos surpass 2.5 million won, which translates to around $2,300. But, the gains made up to this point will not be taxed.
Previously, South Korea was aiming to levy the tax from 2021. However, the pushback from crypto lobbyists and enthusiasts saw the government delay the implementation of the tax multiple times. A 2022 start date was in the past floated by the South Korean government but was delayed until 2023, as reported in the past.
Today, it seems that 2022 is back in the cards once more. Bitcoin and other cryptos will no longer get classed as tax-free hobbies once South Korea recognizes BTC as a financial asset. Cryptos acquired as a part of an inheritance, or those that are acquired as gifts, also qualify for taxation. Regarding crypto inheritances and gifts, the Herald says:
“In such cases, the price of the asset will be calculated on the basis of the daily average price for one month before and one month after the date of the inheritance or gift.”
More than 38,000 people have already signed a petition for the impending tax since February 10. If the total number of signatures on this petition surpasses 200,000 by the end of March, it will compel an official response from the government of South Korea.
From March, an expected revision to the Specific Financial Transactions Act will also see crypto exchanges fall within new regulatory scrutiny. Adding onto the stronger information security processes, and Anti-Money Laundering measures, this new regulation will also see crypto exchanges forced to implement “real-name accounts,” according to the Korea Herald.
Will the new laws pass or will they be postponed?